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Gold/Mining/Energy : SOUTHERNERA (t.SUF) -- Ignore unavailable to you. Want to Upgrade?

To: russet who wrote (3843)	7/5/1999 11:34:00 AM
From: VAUGHN	Read Replies (4) \| Respond to of 7235

Hello Russett If its all the same to you, I will reply to your PP here as it is a hallmark of this thread to conduct a healthy/heated/critical discussions in the light of day. I hope you don't mind. If time permits I will try to talk to Mr. Moore as you suggest, but such statements leave me very skeptical. If that were true, in theory, SUF/CNB would process some where in the neighbourhood between 70,500,000 and 141,000,000 carats in 1999 assuming 1998's production of 1,400,000 carats as the upper end of annual historic production. Even using DD's suggested optimistic ratio of .22c/M3, such a production number would require the JV process a minimum of 320,454,000M3 of gravels or 73,200M3/hour. Since it is my understanding from DD that we have a planned production of 400M3/hour, I would suggest that there is something of a discrepancy in some one's math. At such an optimistic rate of production, and using even the more conservative figure of $82/c, our claims would presumably yield between $5,780,000,000 and $11,560,000,000 this year. I hope you can appreciate the (un)likelihood of realizing such numbers. I am sure that SUF and Mr. Moore would be thrilled to realize $1,000,000,000 annually from any alluvial operation and probably $125,000,000 would give both companies goose bumps. At the suggested production rate of 400M3/hr. and using DD's (optimistic) numbers of .22c/M3 & $140/c, I don't see how the JV could realize anything more than a highly unlikely number like $54,000,000 for a year's operation, and that is assuming peak and uninterrupted production, which simply is not very realistic. It might be best to keep a level head amid these euphoric predictions and be pleasantly surprised should I prove to have been overly pessimistic. Yes, one 80 to 400carat flawless pink/red/blue/green/violet/yellow fancy would do wonders for these numbers, but there is a reason why fancies and large flawless rough command such high prices... they are incredibly rare! If these goods were commonly mined, they would not be worth $20 to $100 million. Regards P.S. Whiskey pointed out that Teck did a PP with CNB/SWG a few years ago for 750,000 shares which they presumably still have. Therefore, it would seem that they have left their hand in, or out, depending on your point of view. Have a good one.